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Some Thoughts on Insurance

by ETF Base on November 28, 2011

As I set out to embark on a trip to India in December, of course, my wife’s thinking the worst while I’m just psyched to see some neat stuff outside the routine business meetings. That being said, of course, my mind wanders to whether my family would be equipped to deal with some unforeseen event, as unlikely as it may be – another Mumbai terrorist attack? Malaria? Robbery? Who knows?

My Life Insurance Situation

Fortunately (financially speaking), I do have some pretty hefty life insurance. With a portion through my employer and the rest self-funded, My policies exceed $1 Million. I figure with the investments as well, in the event of my demise, my wife could easily pay off the mortgage, pre-pay each of the kids’ college funds now and still get them through highschool without ever even going back to work herself. I’d be highly surprised if she didn’t go back to work, get remarried, whatever, within the next 20 years, so I think I’m covered. However, I’m continually baffled by admissions from married people and parents that they have no life insurance (or wills!). They say, if they die, that’s pretty much the worst thing that can happen and no amount of money would right the situation… or that they just can’t find the time to do it. Certainly not the best legacy to leave.

Umbrella Policy

I initially bought an umbrella policy figuring it would protect me from any lawsuits arising from my blogging. Well, it won’t! But I needed it anyway. It can help supplement any settlements from car accidents, accidents in our home and now that we have a pool, it’s a must-have! Additionally, I entered into a real estate deal last month where an umbrella is highly recommended, especially since we’re renting to crazy college kids!

Car Insurance

I was just talking to a family member who went through a nasty divorce. Long story short, my family member has a son who was a teenager at the time she got remarried. Because she and her son would have had a higher premium, they put the car in the new husband’s name to get the lower rate. In order to do so, the title had to be in his name. Meantime, she paid for the car for her son. Fast-forward a few years and they get divorced. Well, just to be spiteful, the ex-husband (not birth father but stepfather) was withholding the car’s title saying he owned it. That was pretty messed up, but this is the risk one takes in relying on someone else for the better car insurance rate I suppose. This isn’t a scenario I would have ever envisioned initially, but something you may want to think about if you encounter something similar.

What’s the takeaway here? Primarily to reinforce that various types of insurance are needed routinely as an adult, and the considerations are often more numerous and complex than first glance.